What Does History Say About Dell Deal?

This transcript has been automatically generated and may not be 100% accurate.

... I ... of course you know that I'll be going private twenty four billion dollar deal ... Michael Dell founder involved in that they are selling this ... the argument is that in a private Dell one of more space more breathing room with easy to turn the company around ... rather than a public ... Dell ... is that really the case though I these old deals all the cracked up to me ... Mark Hulbert is on the road ... today becomes with its spot from our porch ... it's in your column this is only twenty pounds more than that I'm not ... all of these LBO of all the crackup today ... well ... it turns and as if as a new study which is a huge study and a big is the getting the attention it deserves a big calls into question ... the underlying argument behind these LBO is now ... prior to this study in prior to getting the data that allows this to test that notion ... I have to say the notion itself is rather compelling after all it does seem like it could set company is on a very short lease to unleash ... to have to respond to every quarter to earnings expectations and so forth then if they don't have that ... that maybe they can focus on trial in long-term investment without worry about satisfying investors but this new study by ... three researchers at the Univeristy of taxes ... looked at confidential corporate tax return data which is when you have to look at because otherwise these companies are private in the data is not available ... the look to the operating performance of three hundred and seventeen LBO is over a long period of time ... and found that average either compare themselves or other companies that did not go private ... there was no improvement in operating performance of those LBO is that this is a serious blow to the argument that private equity an LBO firms have been taking over the years ... about why there's such virtually going private ... I've ... really important conclusions on all that and ... intimated calm it's also like calling him going private ... it's really only good for the PE firms to make a lot of money off ... well that's right there are other studies Ifo Gazeta my column that have found that private equity does the private equity firms in general the whole sector doesn't earn ... on average or above average returns by IA by it by investing in a Sylvia's which is to suggest ... I don't know whether we go all way to say this pitch certainly suggests ... that their extracting an exorbitant brands offer these companies ... which might explain if so by ... other big institutional investors in Dell at T Rowe price and Southeastern ... are so was to be overly opposed to this deal ... illustrates one of ... the issues surrounding this this Dell deal specifically ... and that the deal announced although money is out there all the terms of stopping for ... well we haven't really heard what the specific plan is for turning around Bell ... what are they going to do Tivoli yes they did so to try to get more into enterprise market but what new plan is there ... attending this going private deal ... try it does say that they could have a plan and that they wouldn't be able to succeed that that ... indeed it would put the burden of credit seems to me back on them ... to show that they're doing more than simply trying to cash out of a lot of investment in the company that is embedded in its threat were ... HighMark over appreciate as a ... lead on the D C office to appreciate or ... approve the computer that our budget